Penalties for irregularities in the income tax return of individuals

The income statement is not mandatory for all-natural persons, one of the criteria is to exceed the limit established by the DIAN, which in 2021 is $49,849,800 (1,400 UVT), it means, those whose average monthly salary is higher to $4,154,150.

This information must be kept in mind, since the income statement is an obligation and therefore its due compliance is very important to avoid penalties, and not only penalties for non-payment but penalties for irregularities when presenting the income statement.

It is essential to previously review and verify all the information provided to the corresponding body or entity upon receipt of payment.

In this way you can avoid any type of error, delay or omission that may occur, in order to prevent failures in specific details that make the process difficult, receiving unnecessary consequences that involve considerable fines and even prison.

Learn: The benefits of a tax advisory

Types of penalties for irregularities for individuals

Every individual in this process is obliged to declare if they meet the characteristics of being a taxpayer (those who do not comply with the requirements, are non-taxpayers), that in the scenario of being a tax withholding agent and failing in its execution, it must respond to the penalties for irregularities established in the law for this matter.

Penalty for late delivery

When not submitting in a timely manner the statement or submitting them after the corresponding due date, the penalties may be really expensive. There is a 5% penalty for every month of delay.

Penalty for leaving out income

Information not provided accurately and, in its entirety, omitting income from what is accrued in the year, will be punishable by a fine.

Penalty for not submitting information

In the context that the citizen does not comply with the delivery of the corresponding declaration, the sanction in this regard leads to a fine.

Tipos de sanciones por irregularidades para personas naturalesPenalty for error or false information

During its completion, if the data provided shows an error, the sanction can be very onerous. Similarly, in the event of false information or tax fraud to reduce the amount to be canceled, it may be sanctioned with 6 months to 7 years in prison.

Penalty for not submitting a correction return

In regards to the declaration to correct the erroneous documentation or add missing information, in the scenario of presenting more than one or the first after the established deadline, it also presents a fine.

In this sense, in accordance with the provisions of the Law that governs the matter, the aspects identified as illegal tax, lead to the payment of a specific amount, sufficient reason to avoid causing greater consequences, it is necessary to take them into account every year to respond timely. There are many ways in which a penalty can be received in the context of not declaring, omitting data, making mistakes, or falsifying information that can lead the taxpayer to respond for significant fines.

To avoid being sanctioned, keep in mind the processing dates and the documents up to date so as not to have warnings or problems with the law.

Learn: Have you heard about Tax Accounting Services?

How to define a budget for the incorporation of a company in Colombia?

The incorporation of a company beyond establishing or translating a business idea, there are a couple of things that must be put into practice from the initial phase so that some pillars and standards are established for future decision-making and continuous growth.

For this to happen and before launching the business idea to the public, a budget must be defined for the incorporation of the company and for doing so we must first bear in mind that the budget is an advance calculation in which the expenses and income are defined in a certain time or period.

In this article we will explain the factors that must be considered when creating a budget for the incorporation of a company in Colombia

How to calculate the initial budget of my company?

Identifying this will give rise to the first steps of the incorporation of the company, it is of utmost importance before starting to identify what type of company you want to incorporate and the business model.

Once we are clear about this, for the initial budget we must consider the following:

Startup costs:

Here enter those expenses that will be used to capture and define the business idea, such as: Market studies, search for suppliers, brand creation, supplies, per diem, transportation and everything that is needed to establish where the company will go.

Installation costs

Whether it is an online or physical business, the expenses involved in any of them must be determined.

In the case of being physical, the expenses to consider are the rental of the premises, the infrastructure, the changes, and facilities that will allow the continuity of the operation, security, services, etc.

In the case of an online business, the services or products need to be on a website so that users can know more about them and the company in general. Therefore, the cost of creating the website, hosting, domain, and layout of the idea in general must be stipulated.

How to calculate the initial budget of my company

Management and organization costs

In this case, the expenses of registering the company and the costs of drafting the constitutive document, books, commercial and fiscal records, taxes, among others, are included.

The budget for the incorporation of a company in Colombia is calculated based on capital, economic activity and domicile, among others. The steps that you will find below will serve as a guide when starting the formalization of the company and this information must be considered so that everything goes well.

  1. Request for authorization of the company name in the Chamber of Commerce.
  2. If the name is authorized, go to the DIAN to process the Pre-RUT (Tax Registry).
  3. Open a bank account in the name of the company in process of incorporation.
  4. Back to the Chamber of Commerce to consign documents and books necessary for the registration of the company.
  5. Once the company is registered, it will return to the DIAN to process the final RUT and the Tax Identification Number, NIT.
  6. Get the authorization to invoice at DIAN.
  7. Register the company in the Social Security System.

As you may notice, to define the budget for the incorporation of a company in Colombia, it covers several topics, but not only must a budget be set based on what is going to be spent prior to the incorporation of the company but also what must be considered. following:

Forecast monthly sales

Despite not having clarity at the time of starting, managing a sales estimate will allow you to have an overview of what is expected and to be able to establish goals to which you want to reach and direct the operation to it.

This must be done in a very objective, measurable, and achievable way, so that once the break-even point is reached, progress can be made based on this budget.

Create a cash flow statement

Defining income and expenses will make your company organized and aware of everything that happens in the operation as well as having everything up to date on its obligations.

Since you start your entrepreneurial process, putting on paper what you are going to invest versus what you are going to earn will allow you to always be one step ahead.

Steps to set up a company online

You can become a virtual entrepreneur now, without having to wait, and create your own online society. The chamber of commerce provides advice and tools with which a company can be established from anywhere.

With this “cookbook” we will guide you on the steps to follow to get started.

Most important issues to consider

To set up a company online, before starting the incorporation of a business, these previous steps must be considered, which are of great importance for the success of the company:

  • Define the business idea to implement it:

Here you must keep in mind the reasons why you want to start and create a business.

Determine goals, define why that service or product and how it can be differentiated within the business world.

  • Define resources:

Before starting, drawing and developing the business idea, you must bear in mind the resources that must be considered for the execution of this, such as: Budget, people to hire, if it is going to be a physical, online or with both infrastructures, among others.

When these points are already defined, you can start officially to set up the company before the chamber of commerce of your city.

How to set up a company online?

First of all you need to decide the type of legal constitution that will be used for the company, this means under what type of parameters the company will operate, what will be its form of administration and the tax modality, among others. There are generally two forms of legal vehicles: individuals and companies.

How to set up a company online

Natural person

  • To start a company as an individual, who will be the owner of the company. This person will be the one who exercises all the rights and obligations of the company that will be in his name and will be responsible for the debts and obligations of the company. To start this type of activity, no prior proof of capital is required.
  • You must have a RUT which you can request online through the DIAN website.

Legal person

To continue with the process to set up an online company, through the chamber of commerce you can proceed, request, consult and generate the registration as an individual or to set up a SAS entity.

  • To start a company as a legal entity, the company takes over all the rights and obligations. Debts or obligations are limited to the assets of the company.
  • It can be made up of one or more persons, either natural or legal. To set it up, capital in money or in kind is required and it can function as a joint-stock company, limited liability company, collective partnership, limited partnership or individual limited liability company, among others.

To set it up you must have:

  • Identity document of the legal representative, shareholders and partners.
  • The name of the company and verify that it is not in use.
  • Choose the type of society and economic activities to develop based on the CIIU codes.

The documents and forms completed must be sent to be reviewed, in case you need help, in the chamber of commerce there are virtual advisers that will help you during the process.

The pandemic has provided fast and efficient options in procedures like these. The ease of being able to get everything in one place has been a great advantage for new entrepreneurs.

In case you have any questions or queries, virtuality allows you to have online advice for entrepreneurs that allows you to streamline the processes and be more sure of the steps to set up the company.

It is important to be well informed and carry out the process based on a good and rich source of information, that is the only way to ensure good results and therefore the success of the creation of a virtual company.

Learn: Steps that a foreigner must follow to set up a company in Colombia

Steps that a foreigner must follow to set up a company in Colombia

The inflow of foreign capital has been one of the engines that has driven economic and financial growth in the country in recent years. This has been possible due to current economic policies, which offer foreign investors optimal conditions for the establishment of private industries and businesses. In this article we will explain the steps you must follow to set up a company in Colombia legally.

  1. Define the business name of the company

The business name refers to the legal name with which the company will be identified in the commercial sphere. This is an essential legal requirement, and it is important that it is not assigned to another company, otherwise, it cannot be registered in the corresponding public entity (commercial register).

  1. Define the type of company

Defining the type of company that is going to be carried out is an essential element for setting up companies in Colombia. The types of commercial companies are:

  • Limited company
  • Limited Liability Company
  • Collective Society
  • Stock Simplified Company
  • Sole proprietorship

Most investors opt for Public Limited Companies, especially because in the event of a legal problem, they will only respond with the capital destined exclusively for the company and not with the shareholders’ equity.

  1. Take to the Mercantile Registry

Subsequently, you must take all the documents to the commercial registry and wait for the entity to legally approve setting up the company in Colombia. This process can take some time because the number of signatures that are registered daily in the country is extensive, so you must be patient while waiting. It should be noted that carrying out this process has a cost of 0.7% of the capital to be subscribed.

How to create a company in Colombia as a foreigner

  1. Register with DIAN

After the company has been formally registered in the commercial register, it continues to be registered before DIAN (Tax Administration). To do this, you must request the Tax Office the Tax Identification Number (NIT), this will be the document that will allow the entity to monitor and control the fiscal situation of the company. This procedure can be requested through the entity’s website.

If you have any questions about registering with DIAN, visit the institution’s website.

  1. Registration with the local Chamber of Commerce

Then you will proceed to register the company at the headquarters of the Chamber of Commerce of the city where the company will reside. It is important that, in addition to the legal documentation, you also supply the company’s accounting books.

  1. Legalize foreign investment

A crucial requirement that all foreigners must comply with is to legalize foreign investment, which is carried out through the Banco de la República. This must be carried out around the first three (3) months after the capital enters Colombia and after completing the necessary legal forms.

  1. Open a business bank account

Then you will proceed to open a bank account in the name of the company. This account must be used to have control over all commercial transactions that the company executes periodically. Keep up an excellent bookkeeping because DIAN will validate it to make visible the fiscal situation of the organization.

  1. Register the company with Social Security

All companies located in Colombia are required to register to Social Security; this is an essential requirement to hire personnel.

As you can see, all procedures aimed to set up companies in Colombia must be oriented from a legal point of view. Thus, you will avoid legal problems with government authorities, and you will be able to carry out commercial operations within the country.

Find out Do I need legal advice to incorporate a company in Colombia?

Importance of organizational communication for the legal incorporation of a company in Colombia

Organizational communication is an essential element that affects different aspects within companies and businesses. The incorporation of a company in Colombia can be carried out legally, also depending on the communication direction that the company takes in its internal operations, here we will explain how.

Learn what a private company is and some examples.

What is organizational communication?

Organizational communication corresponds to the means and strategies that companies use to communicate certain information to all the departments that make up the company internally.

On the other hand, it is also applied in the commercial sphere. Especially when companies make use of the mass media to get information about a product or service to potential consumers.

This is how organizational communication can be defined as the main center that allows an organization to function. If the members of the same are not able to transmit the information through the pertinent means, the achievement of the goals and objectives of the company will slow down (and in some cases will not be achieved).

What is the type of communication to be implemented in the organization?

This is a factor that the future shareholders of the company should evaluate before carrying it out. Entrepreneurs can rely on the objectives that they are going to establish or the good or service that they are going to produce and then market to define what would be the type of organizational communication that best suits the situation of the company.

It is important to develop an organization chart in which you can graphically visualize how the organizational communication is going to be composed in the company. It will be possible to show the corresponding legal entities what will be the methods that will be applied for the preparation of the communication plan.

what is organizational communication - legal constitution of a company in Colombia

Types of organizational communication

The types of organizational communication that exist are:

  1. Internal communication

The internal communication of a company is the one that takes place inside, between its employees. This is done through meetings, announcements, host manuals, brochures, etc.

  1. Downward communication

It is the type of communication in which all the information regarding the company is issued from the highest positions in hierarchical terms to the lowest. For example, that the general manager of an organization notifies all the employees who work in the production area that they must duplicate the manufacture of inputs.

  1. Upward communication

It is the one where information is communicated from the lowest positions to the highest hierarchically speaking. For example, a worker notifying the general manager that the food processing machine located in the production area was damaged.

  1. External communication

This includes the communication processes that are used to publicize the company abroad.

It has more to do with advertising issues, projected image of the company, social networks, etc. It also allows knowing the opinion of people outside the company about what they think of it.

  1. Diagonal communication

It corresponds to the one where inter-hierarchical communication is aimed at. Therefore, different teams, managers, and directors receive the same type of information.

This type of internal communication is ideal for those who seek to inform the company as a whole about new projects, contextualization or even transmit motivational messages.

Why is organizational communication important to incorporate a company in Colombia?

Because a plan that establishes the type of organizational communication that a company is going to implement allows legal authorities (such as the commercial registry) to identify the seriousness and formality with which an organization is going to operate in the country.

This action inspires confidence and having this resource will facilitate the process for the legal incorporation of the company in Colombia. Similarly, it will allow the organization to meet the proposed objectives more quickly, since it will have a communication system where the information that is issued is clear and precise.

We can see that organizational communication is an essential tool that all organizations must have for the incorporation of a company in Colombia, this is the resource that will allow them to communicate any particular problem and then take actions in order to find a solution to the same.

Effect of accounting services on decision making in small and medium sized entities

Most of the businesses in operation are made up of micro and small companies in Colombia (and all around the world in general), and one of the factors that affects their success corresponds to accounting services, especially because they are given advice on how they should manage their finances in order to make the best decisions in commercial and fiscal matters.

On this occasion, we will explain some cases about how the decision-making of SMEs can be influenced by accounting services to improve their economic situation.

Tax planning

A common mistake many organizations make is in neglecting fiscal control by assigning this work to professionals who are not suitable for the position. This action brings problems to the company with the tax collecting entities and such a scenario could generate audits that lead to paying high fines.

That is why, taking care of the financial statements through an accounting service, the specialist will be able to calculate the tax burdens necessary for the company to comply with its obligations and not go through complicated situations in the tax area.

Ease of loans and financing

accounting services for small and medium businesses

A well-organized and transparent accounting makes a difference for those who seek credit in banks. Loans and financing are necessary to increase the working capital of a company, but these benefits will only be granted if it has well-structured financial statements.

Some reports that are usually requested and that must be carried out by a trained professional are:

  1. Income statement for the year

The income statement for the year compiles all the financial information (income, costs, and expenses) to know the profit or loss of an operation. This type of document helps managers make decisions that require strategic planning.

With this demonstration, some indicators can help in credit analysis, such as:

  • Return on assets
  • Net margin
  • Return on equity
  1. Statement of accumulated profit or loss

This tool uses the net profit shares between the Balance Sheet and the Income Statement for the Year to show the equity situation of a company. Through this control, the manager has a concrete vision of the decisions made.

When you deliver the tax returns to the bank, you give the idea that there is transparency and organization, revealing to the loan officers that your company has credibility and conditions to pay the loan and meet its financial commitments.

We explain if you can start as an employee in another company.

  1. Improved financial and fiscal control

It is common to find small or medium-sized businesses without financial control, as when personal accounts are mixed with business accounts. In such cases, accounting services can be especially useful in the organization and in financial and fiscal control.

An expert in finance and accounting does not only work when you need to file your income tax return or when the company needs to formalize admissions and layoffs for your company. The accountant can prepare more complex reports, which are critical to the smooth running of a firm. Some of them are:

Cash flow

One of the first reports for efficient management is cash flow. It is a financial control for a certain period of time and analyzes all the inflows and outflows of cash.

For the report to be conclusive, all expenses, no matter how small, need to be recorded in periodic reports. The analysis time varies according to the need of the company to monitor the movements; They can be done daily, every week, every fifteen days or monthly.

Ledger

This book includes accounts receivable, payable, profit, loss, and various details related to company money. It is necessary in any industry, since it allows to control all the movements of the account, knowing the balances, statements, balances, and other information so that the tax obligations can be analyzed.

Daily book

The Daily Book is a record in which all the daily operations of the company must be transposed; this is a legal requirement. Thus, it has requirements and procedures, such as its external presentation and how data must be entered into the book.

Know what the legal forms of company are.

In this sense, accounting services will allow SMEs to have effective control over how to manage the capital that enters and leaves the organization to keep their financial indicators constantly growing. In the same way, they will be given clear instructions on how to manage the tax area to avoid problems with the tax collecting institution (DIAN).

Can you start a business being an employee in another company?

Economic growth coupled with a greater supply of professionals has allowed more and more people to develop individual business models in the country. In this opportunity, we will explain the requirements that must be followed to start a company in Colombia, and how to undertake being an employee of another organization.

How can you start a business being an employee in another company?

Most professionals, after graduating, the first thing they think about is entering the labor market to access a job that can cover their respective expenses. It is clear that the number of employees working in an organization is much greater than that of entrepreneurs or business owners.

However, there are also individuals who, despite working in a company, also plan to develop individual business models, so as not to depend so much on bosses and become independent.

Many professionals, despite having a desire to undertake, may present obstacles that prevent them from starting a business; be it a shortage of time, lack of market knowledge or insufficient capital. However, it can be undertaken even if you are experiencing these adversities.

Steps to start a business being an employee in another company

We will show you a series of steps that you can follow to take even if you find yourself working in another organization: These are:

  1. Do a market study

The first thing that you would have to carry out is a market research, in which you will try to make visible any problem that a population presents; in order to create a good or service that can satisfy that need. You have to analyze the internal and external variables of that geographic space to evaluate what could be the strategies that you can use to reduce the margin of error and be successful in the attempt.

  1. Analyze the competition

You need to evaluate those companies that could become potential competitors of your brand. Thus, you can use different strategies that differentiate you from any business, displacing possible adversaries.

Similarly, you can take advantage of the fact that you are working in a company to collect all the information regarding it that may be useful to you. For example:

  • How are account statements handled?
  • How are budgets prepared?
  • What steps did the company have to take to get to where it is?
  • What is the target audience for the goods or services you offer?

It does not matter if the business model you want to develop is not related to your work in that company; because you can use all that information to get an idea about where you could start to set up a company in Colombia.

  1. Seek advice

If you do not have much knowledge related to the business area, you can consult with expert professionals who can explain what risks you have to assume to formalize the business, how the market behaves in the city where you intend to establish the business, how much is the capital that is deserved to run it, among many other variables.

  1. Time evaluation

Permanent jobs consume a significant amount of time, so it can be complex to invest time in your business project. In this case, you have to take advantage of those days that you are free (weekends, for example) to allocate, even a few hours of your time in your entrepreneurship model.

On the other hand, you must analyze how long you plan to be employed. Many entrepreneurs work for a short time while developing their respective businesses. After the latter have materialized, they leave their respective jobs to dedicate themselves exclusively to their companies.

  1. Take advantage of digital media

Thanks to the digital age, it is much easier to undertake now than before. Especially since many employees have been able to develop business models based on E-Commerce where they sell a large number of products in virtual stores.

At the same time, there are other people who monetize articles on blogs and web pages, which allows them to enjoy an additional income in addition to what they receive in their respective jobs.

However, keep in mind that at the beginning you will not earn much. Large companies began generating minimal income, but with hard work and effort they managed to position themselves in the market. You must be patient in obtaining the results.

These are the types of companies that can be established in Colombia.

As you can see, it is possible to undertake and be employed at the same time, it is all a matter of knowing how to organize and plan your business ideas. If you follow all these steps, you can substantially reduce the margin of error in the process to set up a company in Colombia.

What are accounting services and why are they so important for a business?

For a company to be incorporated and kept in constant growth, it is necessary to have knowledge regarding accounting and business administration, in order to properly take advantage of the physical and financial resources of the organization in relation to the fulfillment of its objectives. Hence the importance of accounting services for many companies when executing their business operations. In this article we will explain more about it.

Learn about the legal requirements to start a business in Colombia.

What is the importance of accounting for a business?

The importance of accounting for businesses includes routines related to ancillary duties, financial planning, and strategic planning. The accountant is responsible for the tax and accounting department, which implies taxes filings. These, in turn, rely on correct accounting information gathered from invoices, financial reports, and bank statements.

In addition to this more mechanical activity, the accountant also has the routine of generating reports or managerial statements for the decision-making of managers. Next, we will let you know the main reasons for accounting services.

What accounting services are offered to companies?

Within accounting services there are numerous practices that can be carried out so the company can improve its financial management. Some of them are:

  • Preparation of financial statements

The preparation of financial statements is essential in several situations. If your business needs a loan or financing, for example, statements such as the Balance Sheet and Income Statement for the year will be required. These two documents should be prepared based on the daily movement of the organization and demonstrate the importance of accounting for your business.

In addition, bank statements and billing reports may be required to obtain third-party capital from financial institutions, which must be up-to-date and consistent with the reality of the company.

Another possibility linked to the need to prepare the financial statements is linked to a possible problem with the tax authorities. Either due to differences in tax collection or even possible absences in payment. Only with an updated bookkeeping you can verify the details of the payments so that any possible doubts are taken care of.

Finally, if the company wishes to participate in a bidding process, the financial statements and entries must be updated. Since several documents, including accounting documents, are required to participate in this process. 

  • Cost analysis

Another great advantage of using bookkeeping is the possibility to know, in detail, what are the costs, expenses and income of the companies. This detail is used for various issues such as the correct definition of the sale price of the products and services to be marketed.

With a precisely calculated sales price, it is possible to know the minimum quantity that must be marketed, how much each product or service can make profitable individually and what the overall result of the company is like.

Knowledge of income and expenses will also allow for promotions or differentiated prices, according to times of greater or lesser movement in the company. In addition to these points, it is possible to determine where exactly the money of the company is going, and in the case of overspending, it is possible to cut or replace some costs or expenses.

In the case of revenue, you can understand who your main customers are, what is the frequency of their purchases and the value of the average ticket. This makes a big difference when analyzing the results of your organization, as well as whether a product or service should be reduced, among other trends.

  • Financial planning

The financial management of companies can be optimized with the use of some financial tools; These can only be prepared by a professional accountant. In this context, a tool that stands out is cash flow, which should relate the entire financial movement of the organization, comparing opening cash balances, banks, and short-term investments, as well as income and expenses for the period.

The cash flow will show how much the business has available. Or even, the values ​​that will be available in a certain period and that can be used according to the current needs.

In addition, it provides the financial organization of your company. Thus, the expenses and the receipts are known in detail. This information can and should be verified against cost, expense and income reports for a more complete analysis.

  • Account control

With integrated, computerized, and optimized bookkeeping, this control is much easier, faster, and more objective. Posting on a daily basis all goods transactions will sync the stock and connect different departments to let them know not only the quantities but the amount you must pay to the supplier, as well as the cost of the product to calculate its sale price.

In addition to inventory, supplier and customer accounts also stand out, because a large part of the company’s money is generated and invested in them. With an integrated and updated bookkeeping, you will be able to know how much you must pay to your suppliers, what is your cash availability and how the amounts will be received.

This will allow you to control deadlines, look for better conditions and be attentive to bad debts, looking for ways to avoid them.

Learn what a private company is and its examples.

As you can see, accounting services are essential for the operation of a company. It allows not only to obtain loans, but also to know and correctly calculate the taxes and the sale price of the products. In addition, it avoids possible problems with the payment of taxes, preventing having to pay high fines as a result of an irregularity in fiscal control.

Practical guide for the incorporation of companies in Colombia

Any person who wishes to formalize a business must know all the requirements set forth in the Law for incorporating a company in Colombia. In this article we will present you with a guide on each step that you must follow to correctly comply with this process.

We explain what forms of legal figures exist.

What are the requirements to create a company in Colombia?

First, you must bear in mind that for the incorporation of a company in Colombia you must comply with a series of legal requirements framed in the regulations of the country.

We will present the legal requirements that you must follow to create a company in Colombia. These are:

  1. Choose a company’s name

The business name refers to the name with which you are going to make your company known before the Law and is the first requirement that must be met. This must be registered in the RUES and you have to make sure that the name is original and is not being used by another organization.

To verify availability of the legal name of a company, you must access the portal of the city’s Chamber of Commerce.

  1. Classify your economic activity

In this step, you must define the type of work to be carried out in the company. To achieve this task, you can access the CIIU portal and classify the type of economic activity that you will carry out.

  1. Register as an individual or company

If you are going to formalize the incorporation of a company in Colombia, you must register as a legal entity. You have to keep in mind that the tax rates applicable to individuals are different to the ones for individuals; tax rates for companies are higher depending on the net profits and its size.

On the other hand, regardless of whether or not the company has registered profits during the year; You are obliged to declare the Income Tax to the corresponding government entity.

  1. Register in the RUT (Tax Registry)

The RUT consists of a certificate that is used to access the NIT (tax information number). The latter will allow DIAN to have control of all taxpayers (both individuals and companies) in the country in order to verify who has or has not complied with their tax obligations.

  1. Register in the merchantile registry

After having carried out the previously mentioned steps, you will be able to register the company in the commercial register. The tax that you must pay to carry out this procedure is 0.7% of the total amount.

  1. Open a bank account

Once the company is formally incorporated in Colombia, you must open a bank account with the name of the company. All income received by the company must be exclusively deposited to this account to facilitate the bookkeeping and tax control of the company and avoid inconveniences with the tax office in case of carrying out an inspection.

It is important to note that this step must be completed regardless of whether it is a small, medium or large company. All must have their respective bank account with the name of the company to declare VAT, income tax and other taxes as the case may be.

  1. Register the books in the Chamber of Commerce

You must register the minutes and shareholders books so that they become official and are valid before any government inspection.

After completing this step, the name of the company will appear in the database of the Chamber of Commerce.

  1. Register in the Social Security System

This step is one of the most important because it will ensure coverage against accidents or health problems for employees who formally join the company to work.

We will tell you how to obtain the NIT of a company.

If you want to formalize a business, you must first review all the legal information regarding the incorporation of a company in Colombia so that you are attentive to the requirements that you must follow and the regulations that the Government demands for all commercial activities.

Are there any aids to set up companies?

In the country there are many organizations that are offering incentives to new entrepreneurs to facilitate the process to set up companies in Colombia, thus making a direct contribution to the economic growth of the country. In this article we will explain more about it.

Find out what type of companies are the most used in Colombia.

Why is it good to receive aids for setting up companies in Colombia?

The main reason is because there are several entrepreneurs who have innovative business ideas, but who do not have sufficient financial resources to make them real. Similarly, they also need the support of specialists who can advise them on the feasibility of the project they intend to carry out.

On this occasion, we will mention some of the programs (both private and public entities) that offer these grants for setting up companies in Colombia. However, keep in mind that to apply to each one or to present your idea, it is necessary to comply with all legal requirements established in national law; therefore, bookkeeping, tax and other advice can be of great use to you.

Here are the existing programs:

1. Technoparks

 It is a public social program promoted by SENA. Its main purpose is to finance business projects that are oriented towards the world of information technology, telecommunications, and technology.

If you want to carry out a project that is framed in the world of technological innovation, this is the ideal help for you.

For more information about this social program, visit this page.

2. Apps.co

It is a program financed by the ICT Ministry, the purpose is to provide financial support for those business projects where the use of new information and communication technologies is used to expand the potential of business.

This program also offers consultancies, meetings and calls to discuss those important points for the business initiative to develop correctly.

For more information, visit this website.

3. COLCIENCIAS

Colciencias is a government organization in charge of promoting public policies aimed at the development of science. Areas such as biotechnology, cellular organisms and atomic components are some of the branches that are supported by said state entity.

4. Chambers of Commerce

Each of the Chambers of Commerce of the country grants certain aid to those entrepreneurs who wish to formalize the incorporation of companies in Colombia. Not necessarily in financial matters, but in legal, tax and labor advice.

Likewise, it is relevant to note that every business project that passes through the Chamber of Commerce must be studied, analyzed and evaluated by qualified professionals to determine the viability of the business.

5. Universities

 The vast majority of universities (both private and public) in Colombia have a department where they offer their support to entrepreneurs. Generally, higher education students take advantage of this benefit to make their business ideas known to the representatives of said support center. Thus, receiving the corresponding advice.

6. Ventures Corporation

 It is a large network of allies that are responsible for supporting the establishment of companies to attract more capital to the country. Its main objective is to improve the public, private and mixed business system that is made up in the nation.

On the other hand, this organization offers programs where contests are held to reward those business projects that are more innovative, supporting them financially for their start-up.

For additional information, visit this web page.

7. Bancoldex

Bancoldex is a financial entity that is in charge of supporting any business project through its credit financing. The vast majority of small, medium, and large companies that do not have a large enough share capital go to this institution to formally start their respective companies.

If you want more information about this help, visit this page.

All of these business programs are playing a crucial role in Colombia’s economic development. Especially because they have generated support that motivate potential investors to formalize their respective businesses within the country, increased productivity, formal employment, and the progress of society.

In this way, many young people with great potential have the possibility of achieving their goals in the short, medium, and long term, offering them genuine conditions that allow them to aspire to great organizational achievements.

We explain how to start an accounting process in companies.

We can see that there are numerous aids offered by different organizations to support the establishment of companies in Colombia. Therefore, if you have a business project in mind, do not hesitate to make use of them to carry out your respective business model.

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